Tag Archives: agreement

What is an overall deal?

Also referred to as an “overall first-look deal”, this is basically a first look deal¬†except anything that the producer develops while under this agreement must stay within the studio and cannot be taken elsewhere even if the studio passes. In return, the studio will pay an annual fee to the producer and cover all of his/her overhead costs.

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Consideration…a must.

When you make an option agreement, or a purchase agreement, the buyer must give consideration which is basically a tangible form of payment. You could be the most amazing negotiator in the world and manage to get someone to option the rights to you for free. This however is not legally binding. There must be an exchange of tangible payment in order for this agreement to be hold up in court. Payment could be anything. It could be one dollar, or a shoe, or a tissue; it just has to be tangible. Usually, if the rights-owner is willing to give up the rights for free, the consideration is one dollar.

What is an Option?

An option is the right to acquire a piece of property by subsequent payment of additional money. Once you have discovered a piece of property that you want to acquire the rights for, the first thing you usually do is make an option agreement with the owner. With an option, you pay a small sum (this could range from one dollar to 20% of the overall purchase price) which then allows you to acquire the right to purchase the rights within a specified period of time. In other words, you are paying to reserve those rights in case you decide to buy them in the future. The specified period of time is known as the option period. You can negotiate the length of this time with the owner. During this time you as the producer will try to put the movie together by assembling all the appropriate elements. Should you decide that you want to own the rights and exercise your option, you would pay the remaining amount of the purchase price. Should you decide not to exercise your option, the rights would then revert back to the owner.

WORD OF CAUTION

What is a Writer-Work-For-Hire Agreement?

A work-for-hire agreement is a legal contract that you sign along with a screenwriter. The purpose of this document is to state that you are solely hiring the writer to write the script, and to assure that you will be the owner of the writes once it is completed. Terms such as payment, length, revisions and deadlines vary and are always negotiated between the writer and the producer. To attain a proper work-for-hire document, contact a local entertainment lawyer to draft one up for you.

What is a Negative Pick-Up?

This is similar to a PFD agreement, except the film company will pay a fixed price for the completed film, and it is up to the production company to finance the budget for the film. In most cases the production company will have to seek out a loan in order to finance the film. Because the film company is not financing the film, the production company is able to retain more creative control over the project than if it were made under a PFD agreement.

What is a PFD agreement?

If you want to play in the studio system as producer, a PFD agreement is ultimately what you’re looking for. PFD stands for Production/finance/distribution. This is an agreement between a studio and a production company. The agreement basically states that the studio will hire the production company to produce a particular film and pay them a substantial producer fee. In return, the film will finance and distribute the film. The studio has full control and ownership of all rights pertaining to the film in perpetuity throughout the world. PFD agreements vary in terms of the back-end deal the production company has with the project.